Parker-Hannifin Corporation (NYSE: PH) and Ingersoll-Rand PLC (Ireland) (NYSE:IR) are both large-cap industrial products companies, but which is the superior stock? We will compare the two companies based on the strength of their analyst recommendations, risk, dividends, institutional ownership, earnings, profitability and valuation.

Volatility and Risk

Parker-Hannifin Corporation has a beta of 1.41, meaning that its share price is 41% more volatile than the S&P 500. Comparatively, Ingersoll-Rand PLC (Ireland) has a beta of 1.3, meaning that its share price is 30% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Parker-Hannifin Corporation and Ingersoll-Rand PLC (Ireland), as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Parker-Hannifin Corporation 0 4 14 0 2.78
Ingersoll-Rand PLC (Ireland) 0 6 5 0 2.45

Parker-Hannifin Corporation presently has a consensus target price of $174.00, suggesting a potential upside of 2.54%. Ingersoll-Rand PLC (Ireland) has a consensus target price of $99.83, suggesting a potential upside of 11.62%. Given Ingersoll-Rand PLC (Ireland)’s higher probable upside, analysts clearly believe Ingersoll-Rand PLC (Ireland) is more favorable than Parker-Hannifin Corporation.

Dividends

Parker-Hannifin Corporation pays an annual dividend of $2.64 per share and has a dividend yield of 1.6%. Ingersoll-Rand PLC (Ireland) pays an annual dividend of $1.80 per share and has a dividend yield of 2.0%. Parker-Hannifin Corporation pays out 36.5% of its earnings in the form of a dividend. Ingersoll-Rand PLC (Ireland) pays out 44.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Parker-Hannifin Corporation has increased its dividend for 6 consecutive years.

Profitability

This table compares Parker-Hannifin Corporation and Ingersoll-Rand PLC (Ireland)’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Parker-Hannifin Corporation 8.18% 22.90% 8.06%
Ingersoll-Rand PLC (Ireland) 7.60% 16.64% 6.40%

Insider & Institutional Ownership

80.2% of Parker-Hannifin Corporation shares are owned by institutional investors. Comparatively, 80.6% of Ingersoll-Rand PLC (Ireland) shares are owned by institutional investors. 2.7% of Parker-Hannifin Corporation shares are owned by insiders. Comparatively, 0.7% of Ingersoll-Rand PLC (Ireland) shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Parker-Hannifin Corporation and Ingersoll-Rand PLC (Ireland)’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Parker-Hannifin Corporation $12.03 billion 1.88 $1.80 billion $7.23 23.47
Ingersoll-Rand PLC (Ireland) $13.84 billion 1.64 $1.98 billion $4.02 22.25

Ingersoll-Rand PLC (Ireland) has higher revenue and earnings than Parker-Hannifin Corporation. Ingersoll-Rand PLC (Ireland) is trading at a lower price-to-earnings ratio than Parker-Hannifin Corporation, indicating that it is currently the more affordable of the two stocks.

Summary

Parker-Hannifin Corporation beats Ingersoll-Rand PLC (Ireland) on 11 of the 17 factors compared between the two stocks.

About Parker-Hannifin Corporation

Parker-Hannifin Corporation is a manufacturer of motion and control technologies and systems, providing precision engineered solutions for a range of mobile, industrial and aerospace markets. The Company operates through segments: Diversified Industrial and Aerospace Systems. The Diversified Industrial Segment is an aggregation of several business units, which manufacture motion-control and fluid power system components for builders and users of various types of manufacturing, packaging, processing, transportation, agricultural, construction, and military vehicles and equipment. The Diversified Industrial Segment consists of Automation Group, Engineered Materials Group, Filtration Group, Fluid Connectors Group, Hydraulics Group and Instrumentation Group. The Aerospace Systems Segment produces hydraulic, fuel, pneumatic and electro-mechanical systems and components, which are utilized on domestic commercial, military and general aviation aircrafts.

About Ingersoll-Rand PLC (Ireland)

Ingersoll-Rand Public Limited Company provides products, services and solutions to improve the quality and comfort of air in homes and buildings, transport and protect food and perishables. The Company’s business segments include Climate and Industrial. It is engaged in the design, manufacture, sale and service of a portfolio of industrial and commercial products that include brand names, such as Ingersoll-Rand, Trane, American Standard, ARO and Club Car. Its Climate segment includes Trane and American Standard Heating and Air Conditioning, which provide heating, ventilation and air conditioning systems, and commercial and residential building services, parts, support and controls. It offers energy services and building automation through Trane Building Advantage and Nexia. Its Industrial segment includes compressed air and gas systems and services, power tools, material handling systems, ARO fluid management equipment, as well as Club Car golf, utility and rough terrain vehicles.

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